The success of the funded pension system in Georgia: how many citizens took advantage of the opportunity

The funded pension system, introduced in Georgia on January 1, 2019, is mandatory and is increasingly supported by citizens. The number of people who joined this system, as of December 31, 2023, is about 1.5 million people. This is an impressive figure, which indicates the growing popularity of this type of savings.

Another statistic is encouraging: up to 7.1 thousand people have already received payments on accumulative pension accounts. This means that the system has already started working and allows people to receive additional financial support after retirement.

One of the key points of the funded pension system is the amount that pensioners will receive. According to the established scheme, pensioners received a total amount of GEL 21.6 million. This is a significant amount that can be very useful for citizens when providing for their retirement needs.

I would like to draw attention to Georgia's innovative approach to this system. The state has provided a scheme in which the percentage of savings depends on the annual income of a citizen. Thus, with a nominal annual income of less than 24 thousand lari, 6% of the amount of his salary is transferred to the pension account of a citizen. Interestingly, this amount is shared by a citizen, his employer and the state. At the same time, the state contributes 2% of the salary of each citizen.

For people with an annual salary of GEL 24 to 60 thousand, the state already transfers only 1%. This is a kind of incentive for citizens to increase their income and invest in a future pension.

Interested persons may be curious about the first investments of pension savings made by the agency. In March 2020, the agency invested GEL 560 million in certificates of deposit of highly rated commercial banks in Georgia. This demonstrates the agency's rational and responsible approach to investing funds and ensuring the financial stability of the funded pension system.

The funded pension system in Georgia has demonstrated its effectiveness and benefits citizens by providing them with the opportunity to create an additional financial base for retirement years. This is an important step to ensure a decent life for people in old age and an incentive to increase income and quality of life.